An SAS soldier is under investigation for the alleged murder of an Iraqi
citizen at the height of the conflict, even though a previous police inquiry
was dropped.

The sergeant is the subject of a new inquiry into “historic” claims of abuses by British soldiers. The case is the first murder inquiry involving a member of the special forces to form part of the wider Iraq Historical Allegations Team (Ihat) inquiry.

He was given a suspended two-year sentence by the military judge last week, but members of his family have indicated that they intend to appeal against his conviction. The disclosure about Soldier N could be used to assist this appeal, since his evidence was regarded as crucial by the prosecution.

It directly linked Sgt Nightingale to the weapon and ammunition that he was found guilty of possessing, in the absence of forensic evidence.

The two sergeants had been close friends and flatmates in a house near the SAS’s headquarters in Hereford.

After a tip from Soldier N’s estranged wife in 2011, police searched the home, and found two Glock 9mm pistols, a silencer, hundreds of rounds of ammunition, smoke grenades and a high-explosive hand grenade in the garage.

At a court martial last year, Soldier N was given a two-year sentence at a military corrective training centre and has since been discharged.

The police search also found a Glock 9mm and ammunition under Sgt Nightingale’s bed and he was charged with illegal weapons possession. He was sentenced to 18 months’ detention but was freed after an public outcry.

The new Soldier N case centres on the death of an Iraqi civilian during a raid on a suspected insurgent’s home.

It is understood that in 2004 the ­sergeant fired through a door behind which the civilian was hiding. He said he thought the civilian was armed and posed a threat. The Special Investigation Branch of the Royal Military Police looked into the case, but charges were not pursued after Army lawyers ruled there was “no realistic prospect of a prosecution”.

Documents seen by The Telegraph show he is now under fresh investigation.

The Ihat inquiry, set up in 2010, was seen as a “halfway house” that would show the Government was committed to investigating allegations, while avoiding the cost of a full-blown public inquiry.

However, the process is expected to cost up to £100 million and run until 2015.